The useful starting point

Counseling, a debt management plan and settlement are different services.

Ask what kind of help is being offered

Credit counseling commonly focuses on budgeting and manageable repayment. A debt management plan may combine payments through a counseling organization; it does not erase the debts.

Do not assume that the name of a service tells you its terms. Nonprofit organizations can charge fees, and participation or concessions depend on the arrangement.

  • Is the offer counseling, a repayment plan or settlement?
  • Which services are included?
  • Can the organization explain the alternatives?

Get the costs and plan details

Prepare a side-by-side list of each service's charges and responsibilities. The CFPB recommends asking what you will be charged and what services you will receive before signing up.

  • What are the setup, recurring and other fees?
  • Which creditors would participate?
  • Who receives and distributes payments?
  • What happens if a creditor does not participate?
  • What happens if the planned payment becomes unaffordable?

Look beyond a low monthly number

A manageable payment matters, but so do total cost and how long the arrangement lasts. No plan shown on this site is an enrollment offer or a guarantee of a creditor concession.

This guide does not verify or recommend an unknown organization. If the main issue is a court case, mortgage, federal student loan or tax debt, use the matching legal or official servicing resource.

  • Ask for the proposed terms in a form you can keep.
  • Compare the payment with your own budget.
  • Write down unanswered questions before committing.
  • Use the relevant official resource for debts outside the proposed plan.

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